Tencent Music: Navigating competition and expanding IP monetization

研报英文原文证据摘录

Tencent Music: Navigating competition and expanding IP monetization

Deutsche Bank

Research

Rating Company Date

Buy Tencent Music 13 May 2026

Forecast Change

Asia

China

Reuters Bloomberg Exchange Ticker Price at 12 May 2026 (USD) 9.07

TME.N TME US NYS TME

Price target - 12mth (USD) 16.80

Technology

52-week range (USD) 26.36 - 8.99

Software & Services

NASDAQ 100 29,065

Navigating competition and expanding

Valuation & Risks IP monetization

Leo Chiang, CFA

1Q in-line; proactive measures address challenges Research Analyst

Tencent Music's (TME) 1Q results were broadly in-line, with revenue and adjusted +852-220-36240

net income growing 7% YoY respectively. However, persistent competitive

pressure on both membership and advertising businesses continues to dampen the Key changes

near-term growth outlook. In response, TME is proactively strengthening user TP 21.60 to 16.80 ↓ -22.2%

acquisition leverage through Tencent's ecosystem and intensifying copyright 36,003 to

Sales (FYE) ↓ -3.7%

protection, though we believe the latter will take time to yield significant effects. 34,687

Consequently, we are cutting our FY26/27 revenue forecasts by 4%/6% and Adjusted OP 11,615.4 to

↑ 1.5%

adjusted net profit by 4%/5%. We also lower our long-term FCF estimates to reflect Income (FYE) 11,784.1

ongoing competitive uncertainties. Our target price is therefore reduced to US Adjusted Net 10,351.6 to

↓ -3.5%

$16.8. Despite these revisions, we maintain our positive view on TME's leadership profit (FYE) 9,989.3

in online music streaming and the sustained growth potential from its Source: Deutsche Bank

comprehensive IP-based monetization efforts. The current stock price suggests an

Price/price relative

undemanding 10x FY26 P/E. We maintain our Buy rating.

Pressures on membership and advertising